Article excerpt

Byline: BILL CONDIE

THE findings of the Royal Commission into Australia's largest-ever corporate collapse - that of insurer HIH - confirmed what many in the country have been thinking for a while. This was not "Australia's Enron", as some have styled it, but a sorry tale of incompetence, mismanagement and extravagance rather than a sophisticated Made In America corporate looting.

It is the chronicle, as Royal Commissioner Justice Neville Owen put it, of a "shambling journey towards oblivion", although he made surprisingly little mention of the personal spending sprees executives went on with company money, or the crazy investment schemes in which they sunk retirees' cash.

The case raises uncomfortable questions for Australian boardrooms, law firms and accountancy practices and has involved some the biggest local and international business names.

Andersen was there of course - you can't really run a decent corporate collapse without it - the Australian Prudential Regulation Authority had its knuckles rapped, although the government, its boss, so far has come off lightly.

Minter Ellison, the Australian law firm with the longest presence in the City, saw its London managing partner Margaret Taylor rate a mention along with her colleague Leigh Brown.

Then there's the main cast, some seasoned performers from the OneTel collapse, and others making a debut.

HIH ex-director Rodney Adler, after a starring role in OneTel, makes a triumphant return. He persuaded Williams to buy his FAI Insurance for some pound sterling115 million.

But, like so many of Williams' business decisions, it was a disaster. FAI was a dud with serious and undisclosed under-reserving on its portfolios.

The side-deals after the takeover have led to Adler being banned as a director for 20 years. The main charge related to buying HIH shares through a trust set up by Minter Ellison's Taylor and apparently approved for the purpose by her partner Brown. According to HIH's final auditor John Buttle, Brown himself acknowledged of the deal that "we all know stinks to high heaven" but that "these matters are very difficult to run to ground in terms of a prosecution". …